Mr. Urjit Patel-Reserve Bank of India (RBI) governor recently announced a 25 bps cut in the central bank’s repo rate. Repo rate is the rate at which the RBI lends to banks, to a six year low of 6.25 percent (Oct 4, 2016). The day central bank RBI slashed repo rates; there was a great expectation that many banks will slash their rates. And, this will be beneficial for home loan borrowers as they have to pay less.
Indiabulls Housing Finance Ltd and Housing Finance Development Corporation (HDFC) have cut retail home rates by 40-45 basis points.
Indiabulls Housing Finance and HDFC will offer a rate of 8.65 per cent to women borrowers for home loans up to Rs 75 lakh. Moreover, these banks will offer 8.7 per cent for other borrowers. ICICI Bank had cut home loan rates by 45 basis points to 8.65 per cent from 9.1 per cent earlier.
Now, State Bank of India new home loan interest rates will be 8.60% per annum (from earlier 9.10% per annum). The country’s largest bank has reduced its MCLR (Marginal Cost of Funds Based Lending Rates) rates by 0.90% points across all tenure loans.
F or example your loan amount is Rs 30 lakh loan and tenure is 20 years, earlier you had to pay Rs 27,185 as an EMI that led to total interest Rs 35,24,405. Now, with the current interest rate i.e. New interest rate 8.60%, today’s EMI will be Rs 26,225. Moreover, the total interest will come up to Rs 32,93,972. Your monthly savings will be Rs 960 per month and that is total savings Rs 2.5 lakh for over the given time frame (20 years tenure).
Now, the retail credit growth has shoot up and demand for mortgages has grown up since banks rate cut. This is the right time to buy Paramount Golf Foreste Villas or any residential property due to low interest rate environment and low real estate prices. It is a perfect time to buy your home sweet home. Now, you can save a large amount of money on your home loan! Now, your life will be stress free to a large extent.
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